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Tuesday, April 25, 2017

Ivison: CAF Budget hits Post-War Low

By: John Ivison, The Globe and Mail

Justin Trudeau will head to Sicily next month for a NATO meeting with Donald Trump and other allies. The defence department hopes to release its major policy review before then, but perhaps it would be just as well if the Prime Minister goes empty-handed.

The Americans want Canada to live up to its commitment to spend 2 per cent of GDP on defence, but new figures suggest this year the country will hit a post-war spending low of just 0.88 per cent. Last month’s federal budget said the defence policy review will put the Armed Forces on a “sustainable footing,” but there was no money in that budget — in fact, $933 million earmarked for capital spending was pulled out of the defence budget over a six-year period.

This is a bad omen for the prospects of a major cash infusion. In previous reviews, DND got the money first and then published a policy outlining how it would be used.

Multiple sources say that the military submitted its plan to the federal cabinet only to have it sent back to the department for some pruning.

One particular thorny issue is ballistic missile defence, the cost of which is almost impossible to gauge since the Americans won’t talk hard numbers until Canada agrees to sign on. Nobody in defence minister Harjit Sajjan’s office would talk about cabinet discussions but sources expect the review will fudge on the subject by simply asking the military to examine the issue more closely.

David Perry, a senior analyst at the Canadian Global Affairs Institute, said he doesn’t believe the defence policy review is likely to assuage American concerns that Canada is a free-rider when it comes to defence.

“I’m not hearing they are dealing with a ton of money,” he said.

Before the federal budget, Perry wrote a paper suggesting the budget would establish the fiscal framework for the defence policy review. Ahead of similar exercises in 2005 and 2008, spending increases were included in the budget.

“If the outcome of the Defence Policy Review is an expansionist defence policy, and the minister of National Defence has indicated it will be, its short-term success depends on getting the needed funding put into the fiscal framework in the 2017 budget,” he wrote.

That didn’t happen — in fact, the government withdrew $8.48 billion from the fiscal framework over the next 20 years, to help pay for other priorities.

Trudeau — and his predecessor Stephen Harper — have long argued that share of GDP devoted to defence is not a good measure of Canada’s commitment to NATO.

“While the argument has merit, it would likely carry more weight if the share of our GDP devoted to defence were not in decline,” said Perry.

At $18.7 billion, defence spending is also at a new low in terms of share of total program expenditures at 6.11 per cent.

The same Senate defence committee report that found Canada is approaching a post-war low point in spending concluded that the Canadian military is “chronically underfunded,” pointing out that the Forces need more than $2 billion in new money, just to maintain current operations.

Support in cabinet for a major increase in defence spending is clearly tepid

“As the world becomes a more complex place, especially with rogue regimes and non-state actors seeking and acquiring biological, nuclear and chemical weapons, and mobile missile launch capability, Canada should not rely on others to protect our national interests and defend our sovereignty,” the report said, as it recommended Canada sign up for BMD and double defence spending to 2 per cent of GDP over the next 11 years.

There are no signs that the defence policy review will reflect similar thinking.

Canada has committed to some 600 soldiers for a still-undefined peacekeeping mission in Africa; 450 troops are already in Latvia; a further 830 personnel are contributing to the fight against the Islamic State of Iraq and the Levant.

Gen. Jonathan Vance, Chief of the Defence Staff, said the Canadian Forces are fully capable of doing what has already been announced. But it would be a career-limiting move for a general to suggest otherwise.

Support in cabinet for a major increase in defence spending is clearly tepid, and closing the funding gap does not appear to be a priority for the Prime Minister.

Yet his most important foreign policy task is to have a close working relationship with the President of the United States.

If Trudeau turns up in Sicily with a defence plan that indicates Canada is not serious about paying its own way, he will be greeted by a turbulent President Trump, one in transition between Dr. Jekyll and Mr. Hyde.